Dec. 31 (Bloomberg) -- Fed funds, the U.S. overnight inter-bank lending rate, opened at 0.03 percent, within the Federal Reserve’s target of zero to 0.25 percent.
Fed funds closed at 0.04 percent yesterday after trading from 0.04 percent to 0.25 percent and averaging 0.07 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e-mailed statement.
The Fed has no Treasury purchases scheduled for today, which are permanent open market operations.
The Fed may conduct a test of an overnight fixed-rate reverse repo facility. The temporary open-market operations will use Treasuries as collateral.
In repos, the Fed buys U.S. Treasury, mortgage-backed and agency debt from its primary dealers for a set period, temporarily raising the amount of money available in the banking system. At maturity, the securities are returned to the dealers, and the cash to the Fed. In reverse repos, temporary funds are drained from the system.
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